Lipscombe v Miller[2000] QDC 315

DISTRICT COURT OF QUEENSLAND

          REGISTRY: BRISBANE

APPEAL NO: 3087 of 2000

Appellant:

BARRY LIPSCOMBE

and

Respondent

RAY MILLER

REASONS FOR JUDGEMENT

Delivered the  30^th day of October, 2000.

1. By Notice of Appeal filed on 15^th December, 1999 the appellant appeals against the “whole of the decision of the Magistrates Court at Southport dated 2^nd December 1999 ...”

2. In that decision of 2^nd December, 1999, the learned Stipendiary Magistrate held that the judgement which had been entered against the appellant should not be set aside.

3. The relevant history of this matter is:

1. On or about 4^th March, 1998, the respondent and the appellant had discussions.  The appellant in his material describes himself as the “Managing Director of Contrabart Pty Ltd trading as Contrabart Trade Exchange,” and says that it was in this capacity that he negotiated with the respondent.

2. The respondent alleges that as a result of these discussions on 4^th March, 1998, an enforceable agreement was reached between the respondent and the appellant.  Pursuant to this agreement, it is alleged, the respondent was to “supply to the [respondent] certain stock which would be paid for by the deposit of $20,000 credit in the Contrabart Trade Exchange.”  It is alleged the “trade exchange” was to be made on 4^th March, 1998.

3. On 6^th March, 1998 a fire destroyed much, if not all, of the stock said to be the subject of the agreement.

4. On 19^th March, 1998 a plaint and summons issued in the Magistrate’s Court at Southport.  The particulars of claim were hand written and recite the matters set out above, and conclude by alleging “The defendant failed to make the trade exchange and has failed to make the outstanding payment in cash.”^[1]

5. The plaint was served on 24^th March, 1998.

6. An entry of appearance and  defence was filed on 8^th April, 1998. In it it was specifically denied that the appellant had been party to a bargain with the respondent, and that the appellant traded as “Contrabart Trade Exchange.”  There were general denials.

7. On (apparently) 25^th June, 1998 the respondent requested a pre-trial conference.

8. That request was granted, and on 26^th June, 1998 the Deputy Registrar ordered that the conference take place at 2pm on 4^th August, 1998.

9. It is clear that notice of this conference reached the appellant,^[2]  and that it contained warnings of the consequences of failing to attend.

10. The appellant failed to attend the conference.  The deputy registrar adjourned it to come on before the Stipendiary Magistrate, who deleted the reference in the plaint  to the defendant as “trading as Contrabart Trade Exchange,” and then (that is, on 4^th August, 1998) gave judgement for the respondent.

11. On 18^th September, 1998 the respondent sought and obtained an order for the oral examination of the appellant.  The examination was set down for 20^th October, 1998, and then for 19^th January, 1999.

12. On 3^rd December, 1998 the appellant made an application to set aside the judgement. 

13. The application to set aside was dismissed after a hearing on 18^th January, 1999.  The learned Stipendiary Magistrate declared that he was “not satisfied the application is made within reasonable time.”

14. The appellant failed to appear to be examined on 19^th January, 1999, and a warrant issued for his arrest.

15. On 4^th March, 1999 a further order for an oral examination was made, and one was ordered to be conducted on 6^th April, 1999.

16. On 9^th August, 1999 a bankruptcy petition was filed (I presume by the respondent, and I presume based on the judgement the subject of this proceeding.)  The petition was first before the Federal Court on 22^nd September, 1999.

17. On 25^th November, 1999 a second application was filed in the Magistrates’ Court seeking orders that the judgement be set aside.  The application was set down for 2^nd December, 1999 (which was the day before the adjourned petition was due to be mentioned in the Federal Court.)

18. On 2^nd December, 1999 the application to set aside was dismissed.  It is from this order that the appellant appeals.

19. The present notice to appeal was filed on 15^th December, 1999.

4. This appeal is by way of rehearing.^[3]

5. The procedures followed by the Registrar and Stipendiary Magistrate on 4^th August, 1998 were as prescribed by the Magistrates Court Rules, 1960.^[4]  Rule 223A(12)(b)(ii)  provided that if a defendant failed to appear at a pre-trial conference as directed then, “if the plaint discloses a sufficient cause of action” the Stipendiary Magistrate may “give judgement or make such order as may be just, including as to costs in accordance with section 192 as if the defendant had failed to appear at the hearing.  The provisions of section 192(2) shall apply; ....”

6. Rule 192(2) provided that, in the case of a claim for a debt or liquidated amount the court could, when a defendant failed to appear at trial, give judgment for the plaintiff’s claim without requiring the plaintiff to give evidence.

7. The appellant submits that the claim in this action was not for a “debt or liquidated amount,” and hence submits that the only proper course for the learned Stipendiary Magistrate was to enter judgement for damages to be assessed, or (perhaps) to have received oral evidence from the plaintiff in respect of his claim.  As neither of these courses was followed it is submitted that the course in fact taken by the learned Stipendiary Magistrate was not one authorised by the law, and hence the judgement is a nullity and should be set aside ex debito justitiae.^[5]

8. The judgement of Scholl J. in Alexander v. Ajax Insurance Co. Ltd.^[6] has often been regarded as containing an excellent analysis of the cases (to 1956) involving consideration of what is meant by the expression “liquidated demand” - which I take to be synonymous with “liquidated amount.”  In essence His Honour concluded that a claim for an indemnity against total loss under an insurance policy was not a “liquidated demand,” but his review of the authorities demonstrates some of the difficulties in coming up with an all embracing definition of what the expression means. 

9. I do not propose to examine the cases before or since Alexander in order to see whether I can distill such a definition.

10. In my view the cases demonstrate that if a claim is for a sum certain, or for an amount which is readily calculable by reference to well known formulae or objective criteria then it will be a claim for a liquidated amount.

11. It will be recalled that in this case the claim alleged an agreement for the respondent to supply stock to the appellant “which would be paid for by the deposit of $20,000 credit in the Contrabart Trade Exchange.”

12. In my view the claim so expressed is a claim for a liquidated amount.  The defendant under the agreement, it seems to me, was to pay for the goods by deposit of the amount of $20,000 into the account, or at least cause there to be raised in the account a credit for the respondent of $20,000.  In either case the plaintiff would end up with an account in credit to the extent of $20,000, and, neither course having been followed by the appellant, the loss of the respondent is the sum certain of $20,000.

13. The appellant has not argued any other basis on which it could be said that the judgement was irregularly entered. 

14. In my view, the learned Stipendiary Magistrate was correct in holding that the appellant was not entitled to have the judgement against him set aside on the basis that it was irregularly entered.

15. I now have to consider whether the learned Stipendiary Magistrate should have set aside the judgment even although it was regularly obtained.

16. In this case it is conceded that the appellant’s material demonstrates that, if he were to be believed, he would have a defence to the respondent’s claim.^[7]

17. There was no material before the learned stipendiary magistrate (or otherwise placed before me) to suggest that the respondent has been prejudiced in any significant way by the time that has been allowed to pass since he first obtained judgment in this matter.

18. In such circumstances I accept that the Courts generally are loathe to “cut out” a defendant who has had a judgement in default of appearance at trial entered against him.^[8]   As the High Court has observed, in another context, “Justice is the paramount consideration in determining an application such as the one in question. ... [S]uch an application is not the occasion for the punishment of a party for its mistake or for its delay ...”^[9]

19. The power to set aside a judgment such as this which has been regularly obtained was to be found in Rule 223A(14).  The rule is in these terms:

... the court may, upon application made within such time as the court considers reasonable, set such judgment aside and order a new trial upon such terms (if any) ... as the court thinks fit.

20. This rule appears to differ from the old District Court rule 229 and the old Supreme Court Order 39 Rule 33 which empowered those courts to set aside judgements entered in default of a defendant’s appearance at trial.  The material difference, for my present purposes, is that neither of the two rules mentioned requires the application to be made within a specified time.  Of course, there are numerous cases which suggest that delay in applying must be explained.

21. On the other hand, rule 193(1) of the Magistrates’ Court Rules, 1960, provided that such an application must be made within seven days.

22. By the time the second application came on for hearing the Uniform Civil Procedure Rules 1999 had come into force.

23. Rule 525 of the new Rules would seem to be the one applicable to this matter when it was before the Magistrates’ Court on 2^nd December, 1999.  It provides:

(4) If the court makes an order or gives judgment under subrule (2), the court may, on application made within the time the court considers reasonable, set aside the order and order a new trial.

24. Hence under both the old Rule 223A(14) and the new Rule 525 the Court has power to grant an application to set aside a default judgment entered in default of a defendant’s appearance at a pre-trial conference only, so far as the rules are concerned, upon an application made “within the time the court considers reasonable.”

25. The learned stipendiary magistrate held that the “application is tardy” and declared that he “was not satisfied that the reason for any delay has been made out.”  It seems clear that he was not persuaded by the appellant that the application was made within a reasonable time.

26. That is a finding of fact, albeit one which necessarily involves a degree of judgment.

27. I am, of course, in just a good position as the learned stipendiary magistrate to form my own conclusion on this issue.

28. In my view the conclusion drawn by His Worship was inescapable.  The original judgment was entered on 4^th August, 1998.  The pertinent application was filed on 25^th November, 1999, almost sixteen months later.  Clearly the appellant knew of the judgment soon after it was entered.  He had applied unsuccessfully to set it aside in December, 1998, and there was no appeal from the dismissal of that application.  He had been ordered to be orally examined in January, 1999 and again in April, 1999.  A bankruptcy petition was filed and its return date was in September, 1999.  Two months are allowed to elapse after the first return date of the petition and the filing of the application to set aside.

29. The onus, it seems to me, is on the appellant to persuade me that the application was filed within “the time the court considers reasonable.”  He has failed to do so.

30. The stipendiary magistrate was not asked to extend time.  It  was suggested that I should.^[10]

31. I do not doubt there is power to extend time in appropriate cases.^[11]

32. The finding that the Magistrate was not persuaded that the application was brought within a time to be regarded as reasonable does not necessarily entail a finding that the time at which the application was brought was unreasonable. 

33. I am mindful of the principles which I have referred to above, and especially the core principle that the Courts do not exist to punish parties for failing to comply with the Rules, but rather to enable the proper resolution of disputes between parties.

34. Nonetheless, I find it impossible to persuade myself that this is a proper case in which to extend the time for the making of the application to set aside.  In coming to this conclusion I have kept in mind the fact that the defendant has been (and will be, unless this decision is reversed elsewhere) denied a hearing on the merits of his case, and that it is accepted that there are issues he raises which might have founded a good defence.  On the other hand, I have taken into account -

1. The considerable amount of time that has now elapsed since the judgement was entered - more than two years;

2. The fact that the Rules permit an application to be brought within reasonable time, and the fact that the appellant has been unable to persuade the court that his application was brought within reasonable time;

3. The reasons for the initial failure to appear were entirely the responsibility of the appellant - he was aware of the conference, but chose not to attend, giving priority to other business concerns that he then had;^[12]

4. An application to set aside the judgment was made four months after judgment was given - and it would seem, only after the appellant had been served with papers requiring him to be orally examined;

5. That application was dismissed.  The appellant had legal representation.  No appeal was brought from the dismissal;

6. Bankruptcy proceedings have been instituted.  I assume the appellant has had professional advice in respect of them.  Yet no application to set aside was brought until at least three months had passed from the commencement of the those proceedings;

7. No application to extend time was made at either hearing to set aside the judgment - yet the appellant, or at least his advisors, must have been aware of the need to show that the application was made withing reasonable time - or to get that time limit extended.

35. I do not mean to suggest that the above list is exhaustive.  I should say, however, that the factor which has weighed with me most is simply the very long period of time which has now elapsed since judgment was entered in this matter.

36. I am not persuaded that I should order that the time for bringing an application, or the application, to set aside the default judgment be extended.

37. I do not think any ground has been shown for setting aside the default judgment.

38. The appeal should be dismissed.  Costs should follow the event.

39. My orders are:

1. I or der that the appeal be dismissed.

2. I order the appellant to pay the respondent’s costs of the appeal to be assessed.

H. W. H. Botting, D.C.J.